JUDGMENT :- SRINIVASAN, J. – The State is the petitioner in T.C. Nos. 100 of 1962 and 255 of 1962 and it disputes the correctness of the order of the Sales Tax Appellate Tribunal made in Tribunal Appeals Nos. 325 and 326 of 1961. The facts are these : The assessee, Messrs Khosla and Co. entered into a contract with the Director-General of Supplies and Disposals, New Delhi, for the supply of "axle-box bodies". In order to fulfil the contract, the assessee had to enter into contract with the manufacturers in Belgium. The goods were so got manufactured and imported into India and cleared at the Madras Harbour and supplied to certain parties on the instructions of the buyer, the Director-General of Supplies and Disposals, as contained in the contract itself. There was no privity of contract between the Belgium manufacturers and the Government departments who ultimately received the supplies. The manufacturers consigned the goods to the assessee under bills of lading, which, after clearance at the Madras Harbour by the assessee, were despatched for delivery to the ultimate consumers indicated by the Director-General. During the period 1958-59, supplies were made to the stores of the Southern Railway at Perambur and at Tiruchi to the total value of Rs. 1,74,029.50 nP. Of the goods cleared at the Madras Harbour, supplies were also made to the stores in the Mysore State to the value of Rs. 1,32,987.75 nP. While the former were held to be sales within the State of Madras, the latter were held to be sales in the course of inter-State trade assessable under the Central Sales Tax Act. That was the view taken by the department. In appeal, the Tribunal held that in respect of a turnover of Rs. 22,938.75 nP., there was an unconditional appropriation of the goods, and allowed this turnover as covered by sales in the course of import. Against this decision, the State has filed the revision petition T.C. No. 100 of 1962. In respect of the sales to the stores in Mysore State also, the Tribunal held that a turnover of Rs. 40,987.50 nP. bore the character of sales in the course of import and excluded that turnover from assessment. T.C. No. 255 of 1962 has been filed by the State questioning the correctness of this view of the Tribunal. In respect of the sales to the stores in Mysore State also, the Tribunal held that a turnover of Rs. 40,987.50 nP. bore the character of sales in the course of import and excluded that turnover from assessment. T.C. No. 255 of 1962 has been filed by the State questioning the correctness of this view of the Tribunal. With regard to the remaining parts of the two turnovers which were held by the Tribunal as assessable in the first case under the Madras General Sales Tax Act, and in the second case under the Central Sales Tax Act, the assessee has filed the revision petitions T.C. Nos. 219 and 220 of 1962. The short contention of the assessee is that even in respect of these turnovers, the correct view to take upon the terms of the correct would be that they are sales in the course of import and exempt from levy of any tax either under the State Sales Tax Law or the Central Sales Tax Law. The question that has to be decided is accordingly whether on a proper interpretation of the terms of the contract, there was or was not involved therein any sale in the course of import. It is necessary therefore to set out the terms of the contract in some detail. The contract which followed the acceptance of the tender submitted by the assessee was briefly of this description. It specified the name of the indentor as the Controller of Stores, Southern Railway, Perambur, that is to say, the person whom the goods had to be supplied. It stipulated that the delivery shall be made "in eight months ex your principal's works from the date of receipt of the order and the approved working drawings, that is, delivery in India by 31st July, 1957, or earlier". Clause 10 of the contract specified the place of delivery and the terms thereof. The despatch instructions provided for delivery free to the local consignee, to be despatched by goods train. Clause 12 indicated the consignee as (1) Southern Railway at Perambur Works, (2) Southern Railway, Golden Rock Works, and (3) Southern Railway, Mysore South, together with details of the particular items to be despatched to each of the consignees. The particulars governing the supply required the manufacture by a specified manufacturer of Belgium. Clause 12 indicated the consignee as (1) Southern Railway at Perambur Works, (2) Southern Railway, Golden Rock Works, and (3) Southern Railway, Mysore South, together with details of the particular items to be despatched to each of the consignees. The particulars governing the supply required the manufacture by a specified manufacturer of Belgium. Clause 15 is important, for it provided for the inspection of the goods at the works at Belgium. It designated the inspecting officer as the D.G.I.S.D., London, or his representative. It stated that the goods were to be tendered for inspection at the assessee's principal's works in Belgium. Inspection notes were to be issued by the Deputy Director of Inspection, Ministry of W.H. & S., Madras, on receipt of a copy of the inspection certificate from the D.G.I.S.D., London, and "after verification and visual inspection". The other terms with regard to the payment are not particularly important. It would suffice to state that payment was to be made for quantities to be delivered locally. Advance payment of 90% was to be made after inspection and delivery of the stores to the consignee. The proof of delivery was to be the "provisional" certificate issued by the consignee, but subject to the final acceptance by the consignee. Payment was to be made differently as delivery was local, that is to say, at Madras, or was on the f.o.r. basis in the case of consignees outside Madras. In the latter case, 90% of the payment was to be made after inspection and on proof of despatch, and the balance of 10% after receipt of stores by the consignee in good condition. The other provisions stipulated that the stores should on no account be despatched or delivered without getting the same accepted by the inspecting officer stipulated against the inspection clause of the contract. Under special instructions covered by clause 17, sub-clause (1) provided thus : "The contractor is entirely responsible for the execution of the contract in all respects in accordance with the terms and conditions as specified in the A/T and the schedule annexed thereto. Under special instructions covered by clause 17, sub-clause (1) provided thus : "The contractor is entirely responsible for the execution of the contract in all respects in accordance with the terms and conditions as specified in the A/T and the schedule annexed thereto. Any approval which the inspector may have given in respect of the stores, materials or other particulars and the work or workmanship involved in the contract (whether with or without test carried out be the contractor or inspector) shall not bind the purchaser and notwithstanding any approval or acceptance given by the inspector, it shall be lawful for the consignee of the stores on behalf of the purchaser to reject the stores on arrival at the destination, if it is found that the stores supplied by the contractor are not in conformity with the terms and conditions of the contract in all respects." Another clause also provided that the supplier will be responsible for the safe arrival of the goods at the destination. The schedule annexed to the contract specified the goods under various heads referable to the items to be consigned to the three different consignees. The short contention advanced by Mr. Kesava Ayyangar, for the assessee, has been that in these cases the inspection and approval of the goods in Belgium at the manufacturer's works amounted to an appropriation of the goods to the contract so that the property in the goods passed to the ultimate consignee even in Belgium, and if that is so, it is claimed the sales took place outside India and cannot be subjected to any sales tax law. It was argued that the moment the London representative of the Director-General of Supplies and Disposals approved the goods in Belgium, the property in the goods passed. Thus, it was claimed that the Tribunal's view that the major part of the goods supplied were sold by the assessee to the Railway after they had been taken delivery of at Madras Harbour was incorrect, based on a misunderstanding of the terms of the contract read as a whole. It was also said that the right of rejection could apply only in so far as the goods were not according to specification. That would not amount, so Mr. Kesava Ayyangar argued, to negativing the circumstance that the property had already passed to the purchaser. It was also said that the right of rejection could apply only in so far as the goods were not according to specification. That would not amount, so Mr. Kesava Ayyangar argued, to negativing the circumstance that the property had already passed to the purchaser. For the department, while the view of the Tribunal with regard to the major part of the turnovers is supported, the deletion of any part of the turnover as amounting to sales in the course of import on the basis of appropriation of the goods to the contract while the goods were on the high seas is attacked as incorrect and as failing to take note of the special features of the contract. The assessee has filed letters that passed between it and its manufacturers and also the correspondence between it and the Punjab National Bank, Messrs Gordon Woodroffe & Co. etc. dealing with the actual handling of the goods. These are relied upon to show that the mode of treatment of the consignments purported to pass the property in the goods to the purchaser, that is, by appropriation to the contract, when the goods were still on the high seas. It is common ground then that on entering into the contract with the Director-General of Supplies and Disposals, the assessee placed orders for manufacture with the Belgium Company. It is also not in dispute that the London representative made a visual inspection of the goods and verified the quantities manufactured at the works in Belgium and thereafter issued what are called "inspection notes." That the goods were under consignment to the assessee and that it took delivery of the goods and arranged for the despatch by rail or delivery locally to the consignees indicated in the contract is also clear. That the contract gave the right to the consignees to reject the goods is not disputed by learned counsel for the assessee. The argument however is that inasmuch as the orders for the manufacture were placed for the Government of India in accordance with the term of the contract and the shipments were also made only after inspection certificates had been issued by the London representative, the property in the goods must be deemed to have passed even at the stage when the goods were approved by the representative in the factory of the manufacturer at Belgium. This contention was rejected by the Tribunal and rightly in our opinion. The provision for inspection by the London representative cannot be dissociated from the other vital terms of the contract and it cannot serve as an indication of the passing of the property to the purchaser. We have referred in brief to the terms of the contract which make the supplier, the assessee, responsible for the safe arrival of the goods at the destination, fixing the time and date of delivery and for the power of final rejection by the ultimate consignee. If the property in the goods had already passed to the consignee, it is impossible that there could survive a power of rejection. Where and when the property passed always rests upon the intention of the contracting parties and in order to reach the conclusion that the property should have passed even in Belgium, there should be a clear indication in the term of the contract. The preliminary inspection by the London representative was even according to clause 17(1) of the contract not intended to bind the purchaser, the purchaser being the ultimate consignee. This sub-clause clearly specifies that "notwithstanding any approval or acceptance given by the inspector, it shall be lawful for the consignee of the stores on behalf of the purchaser to reject the stores on arrival at the destination." This provision is wholly inconsistent with the plea that the property had passed to the purchaser, the Director-General of Supplies and Disposals, by the mere fact that there was a preliminary inspection and apparent approval by the London representative. This contention seems to us to be wholly untenable and was rightly rejected. As part and parcel of the above contention, it was urged by the assessee that this was a case where the sale by the assessee to the Government department had occasioned the import and that as a consequence the sale was not taxable. Before a sale can be said to have occasioned the import, it is necessary that the sale should have preceded the import. Before a sale can be said to have occasioned the import, it is necessary that the sale should have preceded the import. All the facts herein only serve to show that the terms of the contract did not visualise a sale in the sense that there was to be a passing of the property in the goods to the purchaser when the goods were under manufacture, or after the manufacture had been completed and the goods had been packed ready for export from Belgium. All the stipulated conditions for the completion of the sale which are set out in detail in the contract show that there could be such a transfer of property in the goods only after certain incidents had taken place in relation to those goods only after the import of the goods into India. It seems illogical to conceive of a somewhat contradictory situation where even in the absence of these incidents taking place, it could be deemed that the sale had taken place at Belgium and that such a sale had occasioned the import of the goods. There is no substance in this contention. The next contention which partially found favour with the Appellate Tribunal and which for that reason excluded certain parts of the turnover from the tax was briefly this. It was contended that there had been an unconditional appropriation of the goods to the contract even when the goods were in the course of import and had not yet crossed the customs frontier. If there had been such appropriation, it would certainly follow that the sale was in the course of import. Section 23 of the Sale of Goods Act does provide for this contingency. The question however is whether in the circumstances of this case and having regard to the mode of dealing, read no doubt in the light of the terms of the contract, there had been an unconditional appropriation of the goods which would serve by the operation of the law to transfer the property in the goods to the buyer. This contention of the assessee apparently found favour with the Tribunal to a limited extent. The Tribunal thought and rightly in so far as that is concerned, that the transfer of property by endorsement of the bills of lading is not the only method by which it can be effected. This contention of the assessee apparently found favour with the Tribunal to a limited extent. The Tribunal thought and rightly in so far as that is concerned, that the transfer of property by endorsement of the bills of lading is not the only method by which it can be effected. It could also be effected by the method contemplated by section 23 of the Sale of Goods Act. But upon the question whether there was such appropriation which would have the result contemplated by that provision of law, we are unable to see eye to eye with the Tribunal. In paragraph 8 of the Tribunal's order, it is stated thus : "The evidence of such appropriation relied on by the appellants is the letters addressed by them to their bankers instructing them to send the shipping documents to their clearing agents, get the goods cleared and delivered to the buyers. The instructions to the banks containing details of the appropriation are at pages .......of the paper book filed by the appellants before us. The instructions at page 13 of the paper book are with regard to the disposal of 11 cases containing 283 axle-box bodies shipped per S. S. Belfri; the instructions are to the effect that case numbers 1 to 3, 4, 5 and 11, totaling to 6 cases, should be despatched to Golden Rock Works, Southern Railway, and the remaining 5 cases, viz. 6 to 10, to the Railways at Mysore South. The despatch instructions at page 17 of the paper book are with regard to another consignment of 6 cases containing 150 axle-box bodies shipped per S. S. Belfri; the entire consignment of 6 cases was directed to be despatched to Mysore South. The instructions at page 23 are in respect of a consignment of 4 cases shipped per S. S. Jalakala; the entire consignment was directed to be despatched to Southern Railway, Perambur Works, Madras. In all the above cases, the instructions to the banks showed that the bills of lading were also sent along with instructions directing the bankers to contact the clearing agents, clear the goods and then despatch them to the buyers. There is thus evidence of unconditional appropriation of ascertained goods while the goods were still in the course of import. In all the above cases, the instructions to the banks showed that the bills of lading were also sent along with instructions directing the bankers to contact the clearing agents, clear the goods and then despatch them to the buyers. There is thus evidence of unconditional appropriation of ascertained goods while the goods were still in the course of import. We are of the opinion that the appellants would be entitled to exemption in respect of the turnover covered by these transactions." The question then is whether the view taken by the Tribunal that where the importer instructed his clearing agent to clear the goods from the harbour and despatch the goods to A, B, C, according to his instructions, that would amount to an unconditional appropriation of the goods to the contract, is correct. As a matter of fact, such appropriation, if at all it exists, could only be effected after the clearance of the goods from the harbour. If the view of the Tribunal that unconditional appropriation could be spelt out from this mere direction to the clearing agent is correct, then there is virtually no difference between this method of passing the property and in that effected by transfer of the bills of lading in the name of the purchaser. It is true that the petitioner knew that there were a certain number of cases containing a known number of axle-box bodies on board the ship. It had to supply a certain number of axle-box bodies to each of the consignees and if it instructed its clearing agent to despatch certain cases to the consignee, would that, without anything more, operate as an unconditional appropriation ? Undoubtedly, if the contract contained no other terms relevant to the receipt, approval and acceptance of the goods by the purchaser, the consignment of the goods in the manner indicated may serve to transfer the property in the goods. It is to be noted that under section 23 of the Sale of Goods Act, appropriation has to be unconditional. There should therefore be no possibility of the goods being rejected by the buyer for any reason whatsoever, for an appropriation of this kind can be made even without the consent of the buyer. Can there be an unconditional appropriation which the law requires in the circumstances of the case ? There should therefore be no possibility of the goods being rejected by the buyer for any reason whatsoever, for an appropriation of this kind can be made even without the consent of the buyer. Can there be an unconditional appropriation which the law requires in the circumstances of the case ? The decision of the Supreme Court in Commissioner of Sales Tax v. Husenali Adamji & Company ([1959] 10 S.T.C. 297), dealt with a similar question where an inter-State sale was involved. But in and description with the assent of Wimco given in advance by the terms of clause 4 is effectively displaced by the provisions of clauses 2, 6 and 7 of the later contract which clearly indicate of contrary intention ..... In other words, the respondent sent the logs and left it to Wimco to appropriate to the contract such of them as they accepted as of contract quality and description ....." This decision is undoubted authority for the position that the principle of unconditional appropriation of the goods set out in section 23 of the Sale of Goods Act is not an absolute one but really depends upon the other terms of the contract as well. Where notwithstanding the appropriation of goods apparently conforming to the contract a power is vested in the buyer to reject the goods as not conforming to the contract and in the light of the specific terms of the contract that the preliminary inspection by the buyer's representative was not conclusive and that the ultimate acceptance can only be by the consignee who had the power of rejection, it should follow that the power to appropriate was given by the terms of the contract only to the buyer. That was the view taken by their Lordships of the Supreme Court who held that in the case of such a contract, it was not competent to the seller to claim to have unconditionally appropriated the goods to the contract by the mere fact of separation of the goods and their despatch to the buyer. It seems to us therefore that the view taken by the Tribunal is not supported by authority. The deletion of parts of the turnover on the basis of a transfer of property by unconditional appropriation is not correct. It seems to us therefore that the view taken by the Tribunal is not supported by authority. The deletion of parts of the turnover on the basis of a transfer of property by unconditional appropriation is not correct. The result therefore is that the revision petition filed by the State are allowed and those filed by the assessee are dismissed. The assessee will pay the costs of the department in T.C. No. 100 of 1962 only. Counsel's fee Rs. 100. The assessee obtained special leave and appealed to the Supreme Court. JUDGMENT SIKRI, J. - These two appeals by special leave are directed against the judgment of the Madras High Court in Tax Cases Nos. 100, 219, 220 and 225 of 1962, and involve the interpretation of section 5(2) of the Central Sales Tax Act (74 of 1956) hereinafter referred to as the Act. The relevant facts are these : The appellant K. G. Khosla and Co., hereinafter referred to as the assessee entered into a contract with the Director-General of Supplies and Disposals, New Delhi, for the supply of axle-box bodies. According to the contract the goods were to be manufactured in Belgium, and the D.G.I.S.D., London, or his representative, was to inspect the goods at the works of the manufacturers. He was to issue an inspection certificate. Another inspection by the Deputy Director of Inspections, Ministry of W.H. & S., Madras, was provided for in the contract. It was his duty to issue inspection notes on Form No. WSB. 65 on receipt of a copy of the Inspection Certificate from the D.G.I.S.D., London, and after verification and visual inspection. The goods were to be manufactured according to specifications by M/s. La Brugeoies, ET, Nivelles, Belgium. The assessee was entitled to be paid 90 per cent. after inspection and delivery of the stores to the consignee and the balance of 10 per cent. was payable on final acceptance by the consignee. In the case of deliveries on f.o.r. basis, the assessee was entitled to 90 per cent. payment after inspection on proof of despatch and balance of 10 per cent. after receipt of stores by the consignees in good condition. The date of delivery was "in 8 months ex your principal's works from the date of receipt of order and the approved working drawings, i.e., delivery in India by 31st July, 1957, or earlier". payment after inspection on proof of despatch and balance of 10 per cent. after receipt of stores by the consignees in good condition. The date of delivery was "in 8 months ex your principal's works from the date of receipt of order and the approved working drawings, i.e., delivery in India by 31st July, 1957, or earlier". The assessee was entirely responsible for the execution of the contract. Clause 17(1) of the contract provides : "The contractor is entirely responsible for the execution of the contract in all respects in accordance with the terms and conditions as specified in the A/T and the schedule annexed thereto. Any approval which the Inspector may have given in respect of the stores, materials or other particulars and the work or workmanship involved in the contract (whether with or without test carried out by the contractor's Inspector) shall not bind the purchaser and notwithstanding any approval or acceptance given by the Inspector, it shall be lawful for the consignee of the stores on behalf of the purchaser to reject the stores on arrival at the destination, if it is found that the stores supplied by the contractor are not in conformity with the terms and conditions of the contract in all respects." Further, the assessee was responsible for the safe arrival of the goods at the destination. By an endorsement the D.G.I.S.D., London, was requested to issue pre-inspection delay reports regularly to all concerned, including the Railway Liaison Officer, C/o. D.G.S. & D. Shahjahan Road, New Delhi. He was also requested to endorse copies of the inspection certificates to the Director of Inspection, Ministry of W.H. & S., Bombay. It is further found by the Sales Tax Appellate Tribunal that "the Belgium manufacturers, after manufacture, and consigned the goods to the appellants by ship under bills of lading in which the consignee was the appellant themselves. The goods were consigned to Madras Harbour, cleared by the appellants' own clearing agents and despatched for delivery to the buyers thereafter." In pursuance of this contract, the assessee supplied axle-box bodies of the value of Rs. 1,74,029.50 to the Southern Railway at Perambur Works and of the value of Rs. 1,32,987.75 to Southern Railway, Mysore. The Joint Commercial Tax Officer held that the former sales were liable to tax under the Madras General Sales Tax Act and the latter under the Central Sales Tax Act. 1,74,029.50 to the Southern Railway at Perambur Works and of the value of Rs. 1,32,987.75 to Southern Railway, Mysore. The Joint Commercial Tax Officer held that the former sales were liable to tax under the Madras General Sales Tax Act and the latter under the Central Sales Tax Act. He rejected the contention of the assessee that the sales were in the course of import. He held that "there was no privity of contract between the foreign seller and the Government for the goods. The goods were shipped only as the goods of the seller and intended for them. They were cleared as their own and delivered after clearance. The transaction is therefore one of intra-State sales and not one in the course of import. The sale is completed only when the goods are delivered in this State and so it is not occasioning the import. It is also seen from the contract of sale that the terms of delivery are f.o.r. Madras. Again clause 17(1) of the contract says that any approval where the Inspector may have given in respect of stores materials or other particulars and the work or workmanship involved in the contract shall not bind the purchaser and notwithstanding any approval or acceptance given by the Inspector it shall be lawful for the consignee of the stores on behalf of the purchaser to reject the stores on arrival at the destination. It will be seen from the words underlined by me that the purchaser has reserved the right to reject the goods even though an inspection of the goods might have been made. So there is no force in the argument of the dealer that the goods were appropriate to the contract of sale." The assessee filed two appeals but the Appellate Assistant Commissioner, agreeing with the Joint Commercial Tax Officer, rejected the appeals. The Appellate Tribunal on appeal held that the property in the goods had not passed on to the buyers even while the goods were with the Belgium manufacturers and that the sale by the appellants had not occasioned the imports. The Tribunal, however, accepted the contention of the assessee that sales to the extent of Rs. 22,983.75 and Rs. 10,987.50 had taken place in the course of import as the goods had been appropriated to the contract while the goods were on the high seas. The Tribunal, however, accepted the contention of the assessee that sales to the extent of Rs. 22,983.75 and Rs. 10,987.50 had taken place in the course of import as the goods had been appropriated to the contract while the goods were on the high seas. The assessee then filed two revisions before the High Court, and the Deputy Commissioner of Commercial Taxes, Madras, filed two revisions challenging the deductions of the two sums of Rs. 22,983.75 and Rs. 10,987.50. The High Court allowed the petitions filed by the State and dismissed the petitions filed by the assessee. It rejected the contention of the assessee that the property in the goods must be deemed to have passed at the stage when the goods were approved by the representative in the factory of the manufacturers at Belgium. The High Court further rejected the contention of the assessee that the sale by the assessee to the Government department had occasioned the import on the ground that "before a sale can be said to have occasioned the import, it is necessary that the sale should have preceded the import", and as the sale had not taken place at Belgium there was no question of the sale occasioning the import of the goods. Before we deal with the merits of the appeals, we must dispose of two preliminary objections raised by Mr. Ranganadham Chetty, on behalf of the respondents. Basing himself on Management of Hindustan Commercial Bank Ltd. v. Bhagwan Dass (A.I.R. 1965 S.C. 1142), he urged that the assessee should have filed an application for leave to appeal before the High Court before applying for special leave. We see no force in this objection. It is common ground that the Madras High Court had at the relevant time consistently taken the view that no application for leave to appeal to Supreme Court lay before the High Court in matters involving revenue. In these circumstances we dispense with the requirement of Order XIII, rule 2, of the Supreme Court Rules, and overrule the objection. The second preliminary objection raised by him was that the assessee should have filed four appeals and not two appeals because there were four revision petitions before the High Court. We see no force in this objection also. In these circumstances we dispense with the requirement of Order XIII, rule 2, of the Supreme Court Rules, and overrule the objection. The second preliminary objection raised by him was that the assessee should have filed four appeals and not two appeals because there were four revision petitions before the High Court. We see no force in this objection also. Two revisions were filed by the assessee and two by the State in respect of two assessment orders and they were disposed of by one common judgment. The subject-matter of the four revisions were two assessments, one under the Madras General Sales Tax Act and the other under the Central Sales Tax Act. In our opinion, the assessee was quite right in filing two appeals before this Court. The learned counsel for the assessee, Mr. Veda Vyasa, raised two points before us : First that the sales were in the course of import within the meaning of section 5(2) of the Act; and secondly that the property in the goods passed in Belgium and consequently the sales were outside the State within the meaning of Article 286(1)(a) of the Constitution. As we are of the opinion that the assessee must succeed on the first point it will not necessary to deal with the second point. Section 5(2) of the Central Sales Tax Act provides : "5. (2) A sale or purchase of goods shall be deemed to take place in the course of the import of the goods into the territory of India only if the sale or purchase either occasions such import or is effected by a transfer of documents of title to the goods before the goods have crossed the customs frontiers of India." Section 3 of the Act, which deals with inter-State trade and commerce, may also be set out as it employs the same terminology and has been interpreted by this Court. Section 3 reads : "A sale or purchase of goods shall be deemed to take place in the course of inter-State trade or commerce if the sale or purchase - (a) occasions the movement of goods from one State to another; or (b) is effected by a transfer of documents of title to the goods during their movement from one State to another." It is not necessary to set out the two explanations to section 3. It seems to us that the expression "occasions the movement of goods" occurring in section 3(a) and section 5(2) must have the same meaning. In Tata Iron and Steel Co. Ltd., Bombay v. S. R. Sarkar ([1960] 11 S.T.C. 655), Shah, J., speaking for the majority, interpreted section 3 as follows : "In our view, therefore, within clause (b) of section 3 are included sales in which property in the goods passes during the movement of the goods from one State to another by transfer of documents of title thereto : clause (a) of section 3 covers sales, other than those included in clause (b), in which the movement of goods from one State to another is the result of a covenant or incident of the contract of sale, and property in the goods passes in either State." These observations of Shah, J., were cited with approval by this Court in Cement Marketing Co. of India v. The State of Mysore ([1963] 14 S.T.C. 175). This case, it is true, was not dealing with the Central Sales Tax Act, but the Court was dealing with a similar question arising under Article 286 of the Constitution, before its amendment. But the same Bench, in dealing with a case arising under the Act (State Trading Corporation of India v. The State of Mysore ([1963] 14 S.T.C. 188) again approved of the observations in Tata Iron and Steel Co. case ([1960] 11 S.T.C. 655). Sarkar, observed thus : "The question then is, did the sales occasion the movement of cement from another State into Mysore within the meaning of the definition ? In Tata Iron and Steel Co. Ltd. v. S. R. Sarkar ([1960] 11 S.T.C. 655), it was held that a sale occasions the movement of goods from one State to another within section 3(a) of the Central Sales Tax Act, when the movement 'is the result of a covenant or incident of the contract of sale'. That the cement concerned in the disputed sales was actually moved from another State into Mysore is not denied. That the cement concerned in the disputed sales was actually moved from another State into Mysore is not denied. The respondents only contend that the movement was not the result of a covenant in or an incident of the contract of sale." This Court then on the facts of the case, found that the movement of cement from another State into Mysore was the result of a covenant in the contract of sale or incident of such contract. This Court did not go into the question as to whether the property had passed before the movement of the goods or not, and this was because according to the decision in Tata Iron and Steel Co. v. S. R. Sarkar ([1960] 11 S.T.C. 655), it did not matter whether the property passed in one State or the other. Tata Iron and Steel Co. case ([1960] 11 S.T.C. 655) was again followed by this Court in Singareni Collieries Co. v. Commissioner of Commercial Taxes, Hyderabad (Civil Appeals Nos. 950-952 of 1963; judgment delivered on October 12, 1965; since reported at page 197 supra). The learned counsel for the respondent, Mr. A. Ranganadham Chetty, invited us to hold that the observations of Shah, J., in Tata Iron and Steel Co. case ([1960] 11 S.T.C. 655) were obiter, and to consider the question afresh. We are unable to reopen the question at this Stage. Shah, J., was interpreting section 3 of the Act, and although the Court was principally concerned with the interpretation of section 3(b), it was necessary to consider the interpretation of section 3(a) in order to arrive a correct interpretation of section 3 (b). Further these observations were approved in Cement Marketing Co. of India v. The State of Mysore ([1963] 14 S.T.C. 175), State Trading Corporation of India v. The State of Mysore ([1963] 14 S.T.C. 188) and Singareni Collieries Co. v. Commissioner of Commercial Taxes, Hyderabad (Civil Appeals Nos. 950-952 of 1963; judgment delivered on October 12, 1965; since reported at page 197 supra). In the State Trading Corporation case ([1963] 14 S.T.C. 188) in so far the assessment for the assessment year 1957-58 was concerned, this Court applied the principles laid down in Tata Iron and Steel Co. case ([1960] 11 S.T.C. 655). 950-952 of 1963; judgment delivered on October 12, 1965; since reported at page 197 supra). In the State Trading Corporation case ([1963] 14 S.T.C. 188) in so far the assessment for the assessment year 1957-58 was concerned, this Court applied the principles laid down in Tata Iron and Steel Co. case ([1960] 11 S.T.C. 655). Accordingly we hold that the High Court was wrong in holding that before a sale could be said to have occasioned import it is necessary that the sale should have preceded the import. The next question that arises is whether the movement of axle-box bodies from Belgium into Madras was the result of a covenant in the contract of sale or an incident of such contract. It seems to us that it is quite clear from the contract that it was incidental to the contract that the axle-box bodies would be manufactured in Belgium, inspected there and imported into India for the consignee. Movement of goods from Belgium to India was in pursuance of the conditions of the contract between the assessee and the Director-General of Supplies. There was no possibility of these goods being diverted by the assessee for any other purpose. Consequently we hold that the sales took place in the course of import of goods within section 5(2) of the Act, and are, therefore, exempt from taxation. In the result the appeals are allowed, the judgment of the High Court reversed and the assessment orders quashed. The appellant will have his costs here and in the High Court. One set of hearing fee. Appeals allowed.